Long-term care: how to plan for longer life

  • Describe the role of the state in long-term care
  • Explain how to insure for long-term care
  • Identify the key points for advising on long-term care
Long-term care: how to plan for longer life
Photo by Marcus Aurelius from Pexels

Long-term care planning is a key element of later-life financial advice. Any retirement plan will look to mitigate the potential risk of running out of money, yet we still hear reports of this happening. 

When there is no provision for this, care funding can have a potentially catastrophic impact on someone’s later-life assets. 

Increased longevity is the underlying driver and, according to the Office of National Statistics, the number of octogenarians and those over the age of 65 is increasing rapidly. By 2041, the generation born in the 1950s and 1960s will have reached their 70s and 80s.

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Across the world, demand for long-term care is expected to grow, as longevity and advances in medical treatments improve. 

The most recent announcements on social care funding by the government will undoubtedly stir interest among many clients who have known for some time that those better-off will need to pay for their own care.

For years the care system has been, and continues to be, poorly understood, and most clients in past years would not have associated their financial planning needs with a need to provide for this contingency.

For advisers with clients who are either in or approaching retirement, it is an area of advice that cannot be ignored.

Fortunately, a decade since the Dilnot proposals – where a cap on paying for personal care was first proposed – the number of advisers qualified and accredited by the Society of Later Life Advisers to give later-life advice has grown substantially.

This means that clients and families can be confident of having access to the specialist advice they need.

Planning for later life is usually focused on building pension income and assets over the working years. Many clients, especially those born in the 1950s and 1960s, may also have inheritances coming their way – often from the property wealth of their parents.

The advice they need will be around how to best make use of all their assets over retirement, to maintain the lifestyle they want and have enough to pay for care should it be needed in the future.

Long-term care includes the health and personal care provided for those with chronic illnesses or disability.

It also includes support and assistance for the activities of daily life, such as eating, personal hygiene and dressing (these are the social or personal care elements of long-term care). 

Long-term care can be delivered at home (domiciliary care) in an assisted-living type accommodation or in residential care and nursing homes.

Role of the state 

The individual or their family may decide to take complete responsibility for care needs, however the state does have a role. The Care Act 2014 established the statutory duty of wellbeing, and everyone’s needs and circumstances will be unique.

Local authorities have a general duty to promote wellbeing under the Care Act 2014.

Any state provision of long-term care is delivered through local authorities and also the NHS. Legislation and case law have defined how these bodies co-ordinate their respective responsibilities, to ensure that individuals receive the right care for them.